Often government-owned companies in planned economies reward managers based on nonfinancial measures. For example, the government might give mar bonus for exceeding a 5-year-planned target for production quantities. A problom with this method is that managers tend to predict low volumes so that official the targots low. This makes it easier for the managers to meet the targets, but it severely hinders planning because managers do not provide accurato informa about production possibilties. The former Soviet Union developed an allernative performance measurement and reward system. (Click the icon to view the altemative measurement and reward system.) Assume that Cuba adopted this measure at a time when Soviet influence was great. Consider the Palma Soriano Television Manufacturing Company (PSTMC) 19X3, the factory manager, Che Vasquez, had to predict the number of TVs that PSTMC could produce during tho hext year. He was confident that at loast 400 TVs could be produced in 194, and most likely they could produce 550,000 TVs. With good luck, thoy might even produce 650,000 . Government officials told h the new performance evaluation measure would be used, and that X=0.60,Y=0,90, and Z=1.00 for 19X4 and 195. Read the requirements. Requirement 1. Suppose Vasquez predicted production of 550,000 TVs and PSTMC actually produced 550,000 . Calculate the performance moasure Performance measure, 550,000 predicted production = Requirement 2. Suppose again that PSTMC produced 550,000 TVs. Calculate the performance moasure if Vasquez had been conservative and predicted only 400,000 TVs. Also calculate the porformance measure if ho had predicted 650,000TVs. Performance measure, 400,000 predicted production = Data table Suppose F is the forecast of production, A is actual production, and X,Y, and Z are positive constants set by top officials, with X,Y,Z>0. The following performance measure was designed to motivate both high production and accurate forecasts. performance measure =(YF)+[X(AF)] if FA (YF)[Z(FA)] if F>A